Builders Oversights Certain to Lose Money #3 – No Variation Process!
the-successful-builder-Builders-Oversights-Guaranteed-to-Lose-Money-#3 – No-Variation-Process-
So your building client won’t pay your additional invoices! Even though the remedial construction was absolutely necessary, and you can argue the case. But it wasn't in the original building quote and your client didn't authorize it! So you lose! Right?Right!It’s a bad day when a well meaning builder loses tens of thousands simply because he overlooked some paperwork. So here is how to institute a variation process in your building company.
1. Make it Company Policy.
Make it binding company policy that no one does any additional work without a signed authorization from the client. If the job is being run by a foreman, project manager or building supervisor ensure that he fully understands the scope of the contracted works, and review with him any areas that may be outside that scope.
2. Create a Variation Process
Create a variation order process and the documentation necessary to support it. In its simplest form use a carbonated order book. Describe the work, include the estimated cost, or the charge out rates and ensure that this is signed by the client (or a representative) before work begins.
3. Train your Team to Deal with Clients
Train all team members to deal with a client who says, “While you are about it, can you just do…” Teach them to reply with a line like this, “Yes of course we can do that. What I need to do is get the foreman/project manager/supervisor to write up the order and then I can get onto it.” Believe me, this simple line has saved tens of thousands of lost income for my clients.I have seen many cases where variation orders have not been used that have resulted in the builder losing money on the job.
Question
How has it gone for you? Have you earned good money recently? Or are your building profits being challenged? I’d love to hear how you handle variations.Post your comments below
Graeme
P.S. Whenever you’re ready….here are 4 ways I can help you grow your building business:
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